The xCrypto exchange Binance, along with its CEO Changpeng Zhao (CZ), has submitted a request for the dismissal of the legal action initiated by the U.S. Securities and Exchange Commission (SEC). Their argument centers on the assertion that the SEC’s lawsuit lacks a solid basis within the existing securities legislation, with a claim that, “The SEC is, in essence, distorting the language of the securities laws as a means to assert regulatory authority over the cryptocurrency sector.”
Binance and CZ Aim to Have SEC Lawsuit Dismissed
On Thursday, cryptocurrency exchange Binance and its CEO Changpeng Zhao (CZ) jointly submitted a motion seeking the dismissal of the lawsuit brought against them by the U.S. Securities and Exchange Commission (SEC).
In their court filing, legal representatives for Binance and Zhao stated: “The SEC’s allegations against BHL [Binance Holdings Ltd.] and Mr. Zhao should be permanently dismissed.” Additionally, they stated:
“In its pursuit of asserting regulatory authority over the cryptocurrency industry, the SEC is accused of distorting the language of securities laws, notably by removing the term ‘contract’ from the statutory phrase ‘investment contract,'” they asserted.
Furthermore, the legal representatives for the cryptocurrency exchange and its CEO issued a caution: “The SEC is also attempting to extend its jurisdiction globally to encompass transactions taking place on foreign cryptocurrency platforms, contravening established Supreme Court precedent, which dictates that the agency’s regulatory reach ends at the U.S. border.” They emphasized, “Given the lack of authority for such actions, BHL and Mr. Zhao respectfully request the dismissal of the Complaint.”
The Binance legal team proceeded to argue:
“Furthermore, the complaint, among other shortcomings, lacks sufficient allegations to establish that Mr. Zhao personally maintained the necessary contacts with the United States to justify the exercise of personal jurisdiction over him,” as stated by Binance’s legal representatives.
Additionally, BAM Trading Services (also known as Binance US) and BAM Management US Holdings are pursuing the dismissal of the SEC’s allegations against them as well. The SEC initiated a lawsuit against various Binance entities and CZ on June 5. Within the lawsuit, the securities regulatory body classified 12 cryptocurrency tokens as securities.